There have been some new bullish developments in the precious metals market over the last few days suggestive of an imminent rally in gold. Directional momentum in the charts of the two major gold and silver mining company indices HUI and XAU have turned 100% bullish as have several gold ETFs (exchange traded funds). As I've mentioned before on the website, gold and silver mining company stocks often lead the price of the metals themselves. Several other technical factors are pointing to a rally as well including the very overbought U.S. Dollar Index which is now at a zone of strong resistance and looks ready to take an overdue correction and the fact that August is a month that is frequently very bullish for gold. For these reasons I am going to go long in gold today. Silver is looking less bullish than gold at the moment so I am going to hold off buying it for now. (It is not unusual for silver to lag a bit behind gold when a rally in precious metals begins). I want to point out that this may be just a short-term rally and trade. I would love this to be the major breakout in precious metals that we've been waiting for but, as I recently stated in a gold update, the long-term cycles of gold and silver seem to be shifting, and we may not see the final cycle bottoms until next year. That said, it looks like a tradable rally here and it will be made with a tight stop loss in the $1300 area. Going long in gold today.
I will update other markets later this evening (see below).